Global crisis to pull down GDP growth to 5.8%: IEG

The global financial crisis will hit India more this fiscal as the country's growth will be 5.8 per cent, says economic think-tank Institute of Economic Growth.

Government-estimated growth for 2008-09 is 7.1 per cent.

However, as per RBI estimates, GDP growth would be around 6 per cent in 2009-10.

"Based on our macroeconomic exercise, the impact of the global economic crisis on India is going to be higher in 2009-10 compared to the previous year," the IEG said in its latest report.

The crisis will be seen in a fall in external demand and foreign capital outflow, it said.

Unlike in other industrialised countries, in India this crisis initially affected the real sector by reducing external demand, it said, adding that after achieving robust growth for four consecutive years, export growth started showing negative trends since October 2008.

Export sector slowdown is expected to continue for the rest of the year due to recession in most of the industrialised nations, it added.

Swine flu is expected to further dampen international business, it said.